State representatives Alyse Galvin, I-Anchorage, left, Sara Hannan, D-Juneau, and Andy Josephson, D-Anchorage, study proposed amendments to next year’s state budget during a House Finance Committee meeting Tuesday. (Mark Sabbatini / Juneau Empire)

State representatives Alyse Galvin, I-Anchorage, left, Sara Hannan, D-Juneau, and Andy Josephson, D-Anchorage, study proposed amendments to next year’s state budget during a House Finance Committee meeting Tuesday. (Mark Sabbatini / Juneau Empire)

All in a day’s budget debate — voting, sex and taxes

Even the smallest pieces of House committee’s markup show signs of huge policy battles to come

The idea of having a lone state employee dedicate their workday — or even a couple hours of it — to assignments such as election fraud or sex education lawsuits is among the considerations exposing how even the smallest details are creating big rifts and unusual alliances as state House members spend this week working out the fine points of their proposed budget for next year.

A budget of roughly $7 billion with a projected deficit of more than $400 million received more than 80 proposed amendments by House Finance Committee members who’ve spend the past two days on the revisions. Adding to those puzzle pieces are spending requests yet to be considered such as boosting per-student school funding, and ways to pay for it all including new oil taxes and a 2% statewide sales tax introduced during the past few days.

There were colorful contrasts such as nixing a $320,000 expansion of Dolly Parton’s Imagination Library (a free book gifting program for youths) while approving $1 million to boost school lessons promoting Alaska’s resource industry. Yet the committee members also took about $5 million to fund a state takeover of permitting for wetlands development and gave the money instead to Head Start.

Voting and sex ed: big political, tiny economic gains

An example of how even the tiniest item brought up now may have enormous implications when the final budget puzzle is assembled at the end of the session is a proposed 25% cut to the $143,600 cost of a single Department of Law employee whose duties would include investigating allegations of election fraud. Rep. Andy Josephson, an Anchorage Democrat, said the reduction is the estimated percentage of work time the employee would spend on such cases, which are nearly non-existent and appear to be an issue stirred up by Gov. Mike Dunleavy and others for political purposes.

“I understand the governor has a lot of supporters that believe there’s lots of election fraud, but (Deputy Attorney General John Skidmore) didn’t say that,” Josephson said, referring to a presentation where “four or five” potential instances of fraud were detected after a recent statewide election. “In fact he said the opposite.”

A rebuttal during the resulting extended discussion about election integrity — one of the major non-budget issues this session due to legislation related to efforts such as repealing rank choice voting — was offered by Rep. Mike Cronk, a Tok Republican, who said such an investigator will help ensure residents have confidence in the process.

“Whether it’s one case or a hundred cases, to me this is probably important to half of the constituents in Alaska,” he said.

Equally telling, the vote on removing that small amount of funding didn’t fall along the majority/minority caucus lines that are typical for budget matters.

The two Bush Caucus members, representing some of Alaska’s most remote districts, joined the four minority caucus members to pass Josephson’s change and several others by a 6-5 vote. That’s a potentially key element when the budget and other legislation reach their final form toward the end of the session, since House Republicans were only able to form a majority by getting the Bush Caucuses members to join.

A nearly identical skirmish and outcome occurred when Josephson proposed eliminating another Department of Law position — an attorney with a specific focus of litigating “parental rights” disputes with school districts, the central focus of a proposal by Dunleavy that would restrict discussions and activities related to sex and gender in public schools. Those supporting Josephson said they see little or no issues with such content and parents having the ability to be involved in their children’s schools — and legal remedies already exist if problems arise.

“In every case the parental rights and school board cases are developed locally,” said Rep. Sara Hannan, a Juneau Democrat. “To me this is the state attempting to take over those kinds of issues for 53 school districts, and I think that’s the wrong approach.”

As with the elections amendment, the Bush caucus members — Rep. Neal Foster, a Nome Democrat, and Rep.Bryce Edgmon, a Dillingham independent — joined the minority committee members to delete the funding 6-5. Foster said he doesn’t see any “parental rights” issues in his district and “I don’t want to encourage a litigious atmosphere.”

Making the big pieces fit

The Finance Committee did make a number of relatively large changes, such as adding $16 million in education-related programs sought by Dunleavy, but they did little to change the appearance of the overall budget.

Many of the changes were, however, instructive — often in the literal sense. The cut to expand the Dolly Parton library (occurring the same week Wisconsin school students were banned from performing her song “Rainbowland”), for instance, occurred after Cronk suggested it’s a program more appropriate for individual donors. But he enthusiastically backed spending the $1 million to allow the Alaska Resource Education, a largely industry-funded nonprofit, to present its material in K-12 classrooms.

“If we’re not going to teach resource development and how important it is — all the items that are in your iPhones, etc., etc. — I’m not sure what’s really important,” he said.

Another big shift that could benefit education financially involved the nearly $5 million Dunleavy sought to allow the state rather than the federal government to decide if companies can dredge and fill wetlands and waterways for projects. The idea has gotten little support so far from Senate leaders who question its annual cost and uncertain benefits, and that uncertainty is also why Edgmon proposed redirecting the money into Head Start.

The proposal passed by the same 6-5 cross-caucus vote as the amendments for the Department of Law positions.

The biggest change from the governor’s proposed budget remains the size of the Permanent Fund dividend, with Dunleavy proposing “statutory” PFDs of about $3,450 that would result in a deficit of more than $900 billion, while the House trims the deficit by offering $2,700 PFDs. The Senate majority, which is still working on its version of the budget, is proposing a PFD of about $1,300 that would result in a surplus that could pay for additional costs such as boosting education funding.

However, the extra education funding and other likely costs that will be added to next year’s budget — such as deferred maintenance for the University of Alaska — will likely total between $200 million and $400 million, said Sen. Bert Stedman, a Sitka Republican who co-chairs the Senate Finance Committee.

A taxing task

While lawmakers are again talking this year about a “fiscal plan,” as they have for many years, proposals to significantly change the state’s revenue and spending patterns don’t appear as if they’ll make much impact in the current budget.

Bills to potentially collect hundreds of millions of dollars by rewriting the state’s complex oil taxes and/or by imposing a 2% statewide sales tax have been introduced by members of the majority caucus in the Senate and House, respectively. But leaders in the opposing chambers for each bill are giving less than full-voiced support.

The oil tax bill introduced last Friday by Sen. Bill Wielechowski, an Anchorage Democrat, was heavily criticized by Rep. Tom McKay, an Anchorage Republican who chairs the House Resources Committee the bill would be sent to if it passes the Senate. The sales tax bill introduced Monday by Rep. Ben Carpenter, a Nikiski Republican, got less strenuous opposition from Senate leaders, but Sen. Donald Olson, a Golovin Democrat who co-chairs the Senate Finance Committee, said it’s not where he would start in developing a combined approach to a fiscal plan.

“I’m not ruling anything out, but at least at this point sales taxes are not the thing the Legislature normally gets involved with because that’s more the municipalities’ domain,” he said.

• Contact Mark Sabbatini at mark.sabbatini@juneauempire.com

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